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This article revisits the story of one the greatest financial frauds in history: Poyais. In the 1820s, Gregor MacGregor issued bonds for this alleged fictitious Central American state on the London capital market. Putting together scattered evidence reveals a complex, multifaceted experiment undertaken by a private adventurer hoping to politically and economically position himself in a changing world. Poyais was a failed project to establish a settlement on a territory granted by an Indigenous leader and financed through British capital markets. Studying a financial failure provides nuanced insights into the political and legal frameworks defining origination processes of early nineteenth-century foreign loans. Following MacGregor’s actions entails drawing a story with contours that extend well beyond the City of London, revealing a rich set of transatlantic actors and spaces not known to be traditionally linked to the London-based capital market. The story of Poyais constitutes a window into the early financial dynamics of private colonialism and how these contributed to British imperial expansion. The Poyais loan appears as constituting a financial endeavor born from the encounter of different “worlds,” with MacGregor mediating these together but ultimately failing to legally and politically guarantee their lasting encounter.
This paper reassesses two conflicting hypotheses on the valuation impacts of private placements of equity (PPEs), the monitoring/certification hypothesis and the managerial entrenchment hypothesis, by focusing on the shareholder approval, active buyer, and premium pricing features of PPEs. We find that PPEs with these features have significant positive announcement returns and insignificant mean long-run returns, while the corresponding announcement and long-run returns for PPEs without such features are significantly negative. Firms with value-enhancing PPE features are better governed and use proceeds more efficiently. Thus, the heterogeneous nature of PPEs helps reconcile the puzzling return patterns and conflicting hypotheses regarding PPEs.
In this article, we use volatility surface data from options contracts to document a strong, robust, and positive cross-sectional relation between risk-neutral skewness (RNS) and subsequent stock returns. The differential return between high- and low-RNS stocks amounts to 0.17% per week. Preannouncement RNS is positively related to earnings announcement returns, and the positive RNS–return relation is more pronounced for other nonscheduled news releases. This suggests that it is informed trading that drives the positive relation between RNS and subsequent stock returns. We also find that RNS contains incremental information beyond trading signals captured by option-implied volatility and volume.
This chapter is both a retrospective, and also even a requiem, for the “unregulation” argument in Internet law, and a prospective on the next twenty-five years of computer (or cyber) law. The Internet is not a lawless, special unregulated zone; it never was. Now that broadband Internet is ubiquitous, mobile, and relatively reliable in urban and suburban areas, it is being regulated as all mass media before it. While American policymakers advocated a largely deregulatory approach to the internet over the past twenty-five years, the United Kingdom and Europe have emphasized the hybrid of governmental and private market oversight known as coregulation. This approach to making regulation more adaptive addresses key dilemmas that fast-moving, slippery technologies pose for the traditional regulator’s toolkit.
This chapter reviews the history of gaming and wagering as it pertains to casinos, racing, and lotteries. It covers basic game principles, terminology, regulatory and economic aspects, and accounting.
Networked digital systems are engaged in no less than the re-engineering of humanity. While the narrative of artificial intelligence for many decades has been about computers becoming more like people, the reverse is also occurring: People are effectively being turned into machines. Promoting human flourishing means allowing for different conceptions of the good life. That means pushing back on the reductionist systems that private companies engineer for their own interests, and respecting the right to turn off. Robert Nozick’s classic thought experiment of a machine that can simulate any experiences, and a modern-day variant, can help test our ethical intuitions about the consequences of re-engineering humanity. What ultimately differentiates humans and machines is that we can and do make choices that diverge from simple optimization functions. The benefits of networking, automation, and new services that digital connectivity provides should not come at the price of our deepest values.
This chapter reviews the history of toys and games and covers the profit dynamics and structural features of both traditional and also computerized games and toys.
This chapter reviews the history of major sports and ties into media and wagering aspects. These include labor, tax, team transfers, valuation, and accounting issues.
With the rise of surveillance capitalism digital platforms hunt and capture ever more dimensions of once private experience as raw material for datafication, production, and sales. Under these unprecedented conditions, elemental epistemic rights can no longer be taken for granted. Unlike twentieth century totalitarianism, however, surveillance capitalism does not employ soldiers and henchmen to threaten terror and murder. It is a new instrumentarian power that works through ubiquitous digital instrumentation to manipulate subliminal cues, psychologically target communications, impose choice architectures, trigger social comparison dynamics, and levy rewards and punishments – all aimed at remotely tuning, herding, and modifying human behavior in the direction of profitable outcomes and always engineered to preserve users’ ignorance. The result is best understood as the unauthorized privatization of the division of learning in society. Just as Emile Durkheim warned of the subversion of the division of labor by the powerful forces of industrial capital a century ago, today’s surveillance capital exerts private power over the definitive principle of social order in our time. We must promote individual epistemic sovereignty, law, and democracy as the only possible grounds for human freedom, a functional democratic society, and an information civilization founded on equality and justice.
The IBM antitrust case is usually viewed as a cautionary tale of wasteful government overreach into fast-moving technology industries. The case extended from the end of the 1960s to the beginning of the 1980s, when it was dropped by the Department of Justice. Far from being a failure, the Justice Department’s efforts to rein in IBM led to the creation of independent markets for software and personal computers. IBM’s fall from dominance, necessary to open the door for Microsoft, Apple, and the entire Internet industry, was not a foregone consequence of Schumpeterian forces, but the outcome of sustained government action. Unrelenting technological progress is not inherently self-actualizing. While regulators should consider potential innovation harms of intervention, they should not shy away from bold action to promote innovation in protomarkets that otherwise might never develop.